I see that many people have posted regarding this specific problem over some time but I haven't been able to find the answer that I am looking for.

For class, we were given an unadjusted trial balance sheet that needed to be extended into a 10 column worksheet. I have created the worksheet but find myself stuck regarding the adjustment for:

h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2005 fiscal year. The $240 accrued interest for June has not yet been paid or recorded. (Note that the company is required to make a $5,000 payment toward the note payable during the 2006 fiscal year.)

I have entered in the adjustment for the $240 for FYE June 2005 and I assume that the $5,000 does not need to be recorded because that will take place in the next fiscal year (unless the company plans to make the payment in the current year). I may be over thinking it, but it just felt like if they mentioned it, I would need to do something with that figure. Is that correct?

The adjusting entry will be for the interest that has accrued during the month.

There is no adjustment for the notes recceivable.

Thanks, that is what I thought but I just wanted to make sure. Got a little hung up on the small stuff for this assignment. :)